OIL SERVICE STOCKS LEAD ENERGY SECTOR HIGHER

John Murphy
by John Murphy,
Pioneer Technical Analyst

ENERGY SECTOR LOOKS OVERSOLD... Energy stocks have been one of the year's weakest sectors.   The daily bars in Chart 1 show the Energy SPDR (XLE) trading sideways since March and looking oversold.  The XLE would need to clear its red 200-day average and falling trendline to signal a bottom in place.   Energy was Friday's strongest sector.   But that's due mainly to a strong upturn in oil service stocks.

Chart 1

OIL SERVICES ETF SURGES... Chart 2 shows the VanEck Vectors Oil Services ETF (OIH) surging on Friday to the highest level in three months.  And it's leading the energy sector higher.   That may carry good news for the entire sector.  A glance at today's XLE shows three oil service stocks leading it higher.

Chart 2

OIH LEADERS... Chart 3 shows Halliburton (HAL) rising decisively above its 200-day average and its April high.   Chart 4 shows Schlumberger (SLB) having a breakout day as well.  Chart 5 shows Baker Hughes (BKR) hitting a new 52-week high.  It's clearly the strongest of the three energy leaders.

Chart 3
Chart 4
Chart 5
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John Murphy
About The Author:

A trailblazer in intermarket analysis, John authored key texts that shaped technical trading and helped generations of investors decode market trends using charts and correlations. Learn More 

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